06
Apr
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – April 6, 2015

Whats Ahead For Mortgage Rates This Week April 6 2015Mortgage rates ticked upward for fixed rate loans and were unchanged for 5/1 adjustable rate mortgages according to Freddie Mac. Weekly jobless claims were lower in spite of slower job growth reports.

Last week’s economic events included several reports on jobs and unemployment including the ADP report on private-sector payrolls, the Department of Labor’s reports on non-farm payrolls and the national unemployment rate. The details:

Mortgage Rates, Pending Home Sales Weekly Jobless Claims

Fixed mortgage rates rose by one basis point for both 30 and -15-year mortgages. The average rate for a 30 year mortgage rate was 3.80 percent and the average rate for a 15-year mortgage was 2.98 percent.

The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.92 percent. Average discount points for fixed rate mortgages were unchanged at 0.60 percent and rose from an average of 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.

The National Association of Realtors® reported that pending home sales for February increased by 3.10 percent against an expected reading of -0.20 percent and January’s reading of 1.20 percent. This was a welcome surprise in light of severe winter weather conditions throughout much of the U.S.

Weekly jobless claims were lower at 268,000 new jobless claims as compared to the prior week’s reading of 288,000 new claims and expectations of 285,000 new jobless claims. Analysts note that week-to-week reports of jobless claims are volatile, and the four-week-rolling average is a better source for identifying jobless trends.

Non-Farm Payrolls, ADP Payrolls Lower

Labor markets received unwelcome readings as the Labor Department’s Non-Farm Payrolls report fell far shy of expectations and the ADP report, which measures private sector jobs, fell below February’s reading. Non-Farm Payrolls for March reflected only 126,000 jobs added against estimates of 243,000 jobs added and February’s reading of 264,000 jobs added.

This was the lowest reading for Non-Farm Payrolls in 15 months. The March reading raised questions concerning the potential for another economic slowdown and whether or not lower readings for labor reports signaled a temporary slowdown or indicated broader challenges to the economy.

ADP reported 189,000 private-sector jobs added in March as compared to February’s reading of 214,000 jobs added. This was the lowest reading since January, 2014. The ADP report is seen by analysts as a precursor of the Non-Farm Payrolls report.

The National Unemployment Rate was unchanged at 5.50 percent in February; this report lags a month behind Non-Farm Payrolls and ADP reports, so does not reflect the drop in job growth for March.

Labor markets are a priority for prospective and active home buyers as mortgage approval and the ability to afford a home hinges on steady employment. Housing markets could be in for more challenges unless dropping job growth proves to be a temporary situation.

What’s Ahead 

This week’s scheduled economic releases include reports on job openings and minutes of the last FOMC meeting along with Thursday’s reports on mortgage rates and weekly jobless claims.

17
Nov
By support
Chapter 7 Bankruptcy

What’s Ahead For Mortgage Rates This Week – November 17, 2014

Negotiation Tips: How to Ask the Seller to Pay the Closing Costs Last week’s housing related news was lean, with no scheduled reports released other than Freddie Mac’s primary mortgage market survey.

We’ll start with some good news. The University of Michigan / Thompson-Reuters Consumer Sentiment Index reported its highest reading in more than seven years. November’s reading of 89.4 surpassed the expected reading of 88.0 and was higher than October’s reading of 86.9

Mortgage Rates Near 4.00 Percent, Weekly Jobless Claims Up

Freddie Mac reported a one-basis point drop in the average rate for 30-year fixed rate mortgage from 4.02 percent to 4.01 percent; the average rate for a 15-year fixed rate mortgage also fell by one basis point to 3.20 percent.

The average rate for a 5/1 adjustable rate mortgage rose by 5 basis points to 3.02 percent. Discount points for all three loan types held steady at an average of 0.50 percent.

Weekly jobless claims rose by 12,000 to 290,000 against expectations of 280,000 new jobless claims filed and the prior week’s reading of 278,000.

Last week’s report was the ninth straight week that new jobless claims came in under 300,000. The reading for the four-week rolling average was 285,000 new jobless claims, which represented an increase of 6,000 new claims.

What’s Ahead

This week’s number of scheduled economic reports will be more robust. The NAHB Housing Market Index, Housing Starts and the National Association of REALTORS® Existing Home Sales reports will be released.

The minutes of the most recent Federal Open Market Committee (FOMC) meeting of the Federal Reserve will also be released along with weekly mortgage rates and jobless claims data.

22
Sep
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – Sept 22, 2014

What's Ahead For Mortgage Rates This Week Sept 22 2014Last week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

The FOMC statement said that committee members find the economy to be improving at a moderate pace and currently strong enough to further reduce the QE3 monthly asset purchases. The Fed seeks to achieve and sustain its dual mandate of maximum employment and an inflation rate of 2.00 percent. While the unemployment rate is lower than the Fed’s benchmark of 6.50 percent, FOMC members cited concerns that the labor force is underutilized and that labor markets, while recovering, could use further improvement. The Fed repeated its customary statement that the Fed’s monetary policies are not on a pre-determined course, and that FOMC members continually review and interpret developing financial and economic news as part of their decision-making process.

Chair Yellen explained during her press conference that it is not possible to provide a specific date when the Fed will change its target federal funds rate. Economists and media analysts expressed concerns that raising the target federal funds rate, which is currently at 0.00 to 0.250 percent, could cause overall interest rates to rise. Chair Yellen said that she expects the current target federal funds rate to remain for a “considerable time” after the QE asset purchases cease. She also said that it is impossible to provide a specific date when the Fed will change its target federal funds rate and cited multiple influences considered by FOMC when changing monetary policy.

Home Builder Confidence Grows, Housing Starts Fall

The National Association of Home Builders Housing Market Index rose by three points in September for a reading of 59. Analysts had predicted an index reading of 56 against August’s reading of 55. September’s reading was the third consecutive reading above 50. Stronger labor markets were cited as supporting the higher reading, but builders were also concerned by tight mortgage credit standards. Any reading above 50 indicates that more builders perceive market conditions for new homes as positive as those that do not.

August’s housing starts were inconsistent with the Home Builders Index; according to the Department of Commerce, construction of new homes fell by 14.4 percent from July’s reading to 956,000. Analysts expected 1.03 million starts against July’s reading of 1.12 million homes started.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. Average mortgage rates rose across the board with the rate for a 30-year fixed rate mortgage 11 basis points higher at 4.23 percent. The rate for a 15-year mortgage also rose by 11 basis points to 3.37 percent and the rate for a 5/1 adjustable rate mortgage rose from 2.99 to 3.06 percent. Average discount points were unchanged for all mortgage types at 0.50 percent.

New weekly jobless claims dropped to 280,000 against an expected reading of 305,000 and the prior week’s adjusted reading of 316,000 new jobless claims. The original reading for the prior week was 315,000 new jobless claims. The less volatile four-week average of new jobless claim fell by 4,750 new claims to a reading of 299,500 new claims.

What’s Ahead

This week’s scheduled economic news brings multiple housing-related reports. The National Association of REALTORS® will release its Existing Home Sales report for August. Case-Shiller’s monthly Housing Market Index report and the FHFA’s Home Value report will bring new light to national market trends. The Department of Commerce will release its New Home Sales report, and as usual, Freddie Mac’s weekly report on mortgage rates will come out on Thursday.